© Reuters. FILE PHOTO: Diageo CEO Ivan Menezes speaks to guests during the Reuters annual IMPACT summit in London, Britain, October 3, 2022. REUTERS/Maja Smiejkowska
By Richa Naidu and Yadarisa Shabong
(Reuters) – Diageo (LON:) appointed chief operating officer (COO) Debra Crew as chief executive on Tuesday to replace retiring boss Ivan Menezes, becoming one of the few women to lead a blue-chip company in Britain.
The world’s largest spirits company, which makes Johnnie Walker whiskey, Tanqueray gin and Don Julio tequila, said Crew, 52, would take up her new role on July 1, bringing the total number of women to 10. FTSE 100 CEOs.
Crew, an industry veteran who became chief operating officer last year, had been president of Diageo North America, its largest market, and Global Supply since 2020. Her rise comes as Diageo is trying to consolidate its dominance in the United States and establishing several premium brands, in a post-COVID world where people are going out again and making fewer cocktails at home.
The former US military intelligence officer was previously CEO of tobacco company Reynolds American (NYSE:), where she also served as chief operating officer. Prior to that, Crew held positions at PepsiCo (NASDAQ:), Kraft Foods (NASDAQ:), Nestlé and Mars.
“Crew was the most likely successor to the CEO, so it’s not a surprise,” said Tineke Frikkee, a fund manager at Diageo investor Waverton Asset Management. “He has a lot of experience in Diageo’s biggest market, the United States”
“The timing of the succession is always hard to predict, but with 63-year-old Ivan Menezes, it was imminent. I hope Diageo’s strategy remains unchanged,” Frikkee added.
Menezes, who joined Diageo after its formation through the merger of Guinness and Grand Metropolitan in 1997, has significantly increased sales and led the company through multiple brand acquisitions as well as a major sustainability overhaul.
Under his leadership, the company became responsible for around a tenth, or £2 billion ($2.5 billion), of the UK’s total food and drink exports.
Diageo shares fell marginally on Tuesday morning. They have risen 76% over the past decade, outperforming the pan-European index and London’s top-ranking FTSE 100.
“This had been widely anticipated. However, we view Ivan’s departure as a significant loss for Diageo – he has been a brilliant CEO,” said RBC analyst James Edward Jones. “Diageo was in poor shape when Ivan took over, now it’s one of the most impressive companies we cover.”
“Debra Crew is something of an unknown to us. She has extensive experience in consumer staples…however, Ivan will be a very difficult act to follow.”
Laurence Whyatt, analyst at barclays (LON:), said: “The market wants more of the same. Diageo has been an outperformer in tequila, has excellent marketing capabilities and is making great inroads in Scotch whiskey globally, and particularly in India and Latin America. .
“I want to see a continuation of this long-term thinking: establishing more inventory for future premiumization and continued investment in digital marketing to ensure they stay ahead.”
($1 = 0.8118 pounds)
Chart: Diageo shares rise during CEO Menezes tenure- https://fingfx.thomsonreuters.com/gfx/mkt/byprlmnddpe/diageo.PNG
